Category: Public Subsidies

You know that recent train derailment in Philadelphia, the one that, while killing one-eleventh of the average daily number dying in U.S. car crashes (32,719/365 = 89.6), made the top story in all the major MSM outlets? While the standard spin in the MSM was (and of course had to be) the special terrors (and thus foolhardiness) of rail travel, the reality is that these deaths were due to the worse-than-pathetic treatment of passenger rail in this, the home base and proving ground of corporate capitalist dictatorship.

Per today’s edition of The New York Times:

[D]espite having some of the least-extensive passenger rail networks in the developed world, the United States today has among the worst safety records. Fatality rates are almost twice as high as in the European Union and countries like South Korea, and roughly triple the rate in Australia.

The cause? Hardly a mystery:

According to the International Transport Forum of the Organization for Economic Cooperation and Development, the United States invested less than 0.1 percent of its gross domestic product on rail systems in 2013, a quarter of what was spent by Britain and one-sixth of the investments by France and Australia.

Over the past decade, even developing countries including India, Russia and Turkey have consistently invested far greater shares of their G.D.P. on rail.

Per capita, the United States also comes up short. In 2011, the most recent year for which comparative statistics are available, it spent roughly $35 per person on all rail infrastructure.

By comparison, Japan spent nearly three times as much — more than $100 per person — with the 28 member countries of the European Union investing similar sums.

In terms of safety, the return on that investment has been clear. Japan’s famous Shinkansen “bullet train” network has never experienced a fatal crash or derailment in 51 years of operation, while in France the same can be said of its gleaming fleet of high-speed TGVs, which have zipped across the French countryside for close to three decades.

Of course, in market-totalitarian America, “America” means corporate capitalists. Hence, we find the U.S. Energy Secretary out pimping for extension of the reign of human history’s most wasteful lifeblood-to-a–ruling-system product. As reported by Automotive News:

WASHINGTON — The U.S. Department of Energy wants auto suppliers to know that it still has $16 billion in low-interest financing available to support efficient-vehicle programs, and it wants them to step forward for a share of those funds. The department’s lending authority comes under the Advanced Technology Vehicles Manufacturing Loan Program, which Congress created in 2007. Early in the Obama administration, the Department of Energy used the program to lend about $8.4 billion to Ford, Nissan, Tesla Motors and Fisker Automotive. Suppliers were always eligible, but none secured funding. Now, under Energy Secretary Ernest Moniz, the program is being overhauled to make it easier to fund production of technologies such as lightweight materials, efficient engines and low-friction tires.

The changes that Moniz announced today include legal clarifications to show that suppliers are eligible for the program, a promise to respond more quickly to applicants and the creation of a new online application portal.

Moniz announced the program changes on Wednesday during a speech to the Motor & Equipment Manufacturers Association, or MEMA, a trade group representing auto suppliers.

“Today we are presented with an opportunity to hit the accelerator on U.S. auto manufacturing growth,” Moniz said.

To restate: In the year 2014, the person in charge of solving the nation’s energy challenges is bragging about “hitting the accelerator” on making automobiles.

Remember all those promises that things like tree fiber, switchgrass, and cornstalks will soon be rendered into fuel for automobiles? It’s called “cellulosic ethanol.” Its production has been subsidized and mandated for years now.

The latest turn of events is simply humorous: As commercial production of the stuff remains at zero, the EPA is refusing to take a physics-based/EROEI “no” for an answer:

The cellulosic ethanol standard earned the most criticism. A federal court last week tossed out the agency’s requirement for cellulosic ethanol for 2012 as too onerous.

There was no commercial production of cellulosic biofuel last year, but that did not deter the government: It proposed raising the mandate to 14 million gallons from the 8.65 million gallons that was tossed out in court.

“The court recognized the absurdity of fining companies for failing to use a nonexistent biofuel,” said Bob Greco, a director of the American Petroleum Institute. By seeking to nearly double that quota, “EPA needs a serious reality check.”

Current rules stipulate that nearly 10% of the nation’s gasoline supply come from corn-based ethanol. To make that ethanol, up to 40% of the country’s annual corn production can be required.

Of course, such reckless waste is built into cars-first transportation and the corporate capitalist dictatorship that insists on its preservation, come hell or high water.

Meanwhile, no commercial media story on cars would be complete without a whopping dollop of exculpatory fantasy. Hence, CNN quotes, without comment, one “Matt Hartwig, a spokesman for the Renewable Fuels Association,” who contends:

“There is no need to lift the mandate at this time.”

The mandate is crucial, he said, because not only is ethanol a domestic fuel that’s cleaner than regular gasoline, but it spurs investments in advanced ethanol like cellulosic, which can be made from trees or switch grass — not food crops.

Ah, yes, cellulosic ethanol, that magic elixir which, despite a decade of promises, public subsidies, and massive corn-ethanol profits, remains commercially unavailable in the United States! And just how, an actual journalist might have asked Mr. Hartwig, does burning refined sugars from corn kernels “spur investments” in this rank fiction?

Like the rest of their class, the automobile manufacturers are hoarding cash. Automotive News for October 10 cites a new study by IHS Automotive:

Car companies are holding a quarter-trillion dollars in cash and equivalents, says Charles Chesbrough, senior principal economist at the industry consultancy. And the overall cash-to-revenue ratio is a healthy 19.3 percent, insulating from them a financial crisis.

Leading the pack is Toyota Motor Corp., which is sitting on $42.2 billion, according to Chesbrough’s calculations. Volkswagen AG is a close second with $35.9 billion on the books.